"From today, we are connected by new energy, which has already connected Russia with the most powerful partners in Europe," Nikolic said. "Russian gas is the realization of Serbia's energy dream, supply without uncertainty."

Dacic emphasized the project's potential benefits to the Serbian economy.

"South Stream is the biggest investment in Serbia for decades," he said. "The value of the work will be, just in Serbia, around 2 billion euros. We estimate that between 2,000 and 3,000 workers will be engaged in the works. And great economic benefit is expected after the end of works -- may be 100 million euros per year from transit taxes."

Serbia and Gazprom signed the deal in October 2012 to build the 421-kilometer stretch of the pipeline through Serbia at a cost of 1.9 billion euros.

Gas is expected to flow in early 2016. It will have an annual capacity of 63 billion cubic meters.

Gazprom is financing the project initially, and Serbia will pay its share from its transit fees.

In his comments at the launch ceremony, Miller said the project is a landmark in bilateral relations.

"South Stream is a new, strong, page in Russian-Serbian cooperation, Russian-Serbian friendship," he said. "The Serbian part of South Stream is crucial for this project."

Ultimately, the pipeline will run from Russia, across the Black Sea, through Bulgaria, Serbia, and Hungary and then into Western Europe.